Management by Baseball

What do Hall of Fame baseball managers like Connie Mack & John McGraw have in common with today's business leaders? Why are baseball managers better role models for management than corporate heroes like Jack Welch, Jamie Dimon & Bill Gates? And just what does Peter Drucker have to do with Oriole ex-manager Earl Weaver?
Management consultant & ex-baseball reporter Jeff Angus shows you almost everything you need to know about management you can learn from Baseball.

Sunday, February 29, 2004

Chisox Pitching Coach Don Cooper:Aikido in the 'Pen

In a competitive environment, keeping antagonists off-balance
almost inevitably provides a temporary advantage. Some temporary
advantages have permanent benefits.

I keep several tools available in my own management toolbox
for this organizational aikido, though I don't try to teach it
too often, because it's not easy to do successfully and failure
can be politically fatal. In baseball, the risks/costs are a
little lower, but surprisingly aikido is not a ploy managers
frequently deploy. Thanks to Baseball
Musings, I found a lovely illustration with an explicit
rationale written up in the Chicago suburban Daily
Herald. I do love seeing these efforts.

According to the story:

The White Sox feel they
have a secret weapon in the bullpen and they aren't eager to
break out Shingo Takatsu in exhibition games. That's why the
Sox are planning to keep the 35-year-old Japanese relief
pitcher in the dugout when they play American League teams
this spring.

With a funky, sidearm
delivery, Takatsu has been baffling White Sox hitters during
batting practice and his off-speed pitches have been
particularly nasty. "I don't want to pitch him against
any American League team down here unless I have to,'' said
Sox pitching coach Don Cooper. "I'd rather make it a
complete surprise attack. Nobody's seen him, so let's keep
him under wraps.''

Pitchers with unusual deliveries, wind-ups or pitches (like a
screwball, kuckler or eephus)
tend to have an advantage disproportionate to their overall
effectiveness in their first appearances against individual
batters, and that advantage can extend to a few appearances. In
the immediate term (his first appearance against most A.L. teams)
Takatsu has a chance to be more effective if the opposition
doesn't get to see him in spring training, but only "when it
counts".

Now this advantage isn't eternal in most cases. Eventually
when a batter has seen the guy a few times, unless the guy
changes or, like Orlando Hernandez, just has 34 configurations of
wind-up/angle/pitch combo to mix up, the batter zeroes in on
whatever disruptive wierdness the pitcher is pulling.

Cooper's take on this is lovely because it has the immediate
effect of giving his team an incrementally-better performance out
of Takatsu, especially if they use him frequently but for short
bursts concentrated against hitters who haven't seen him.
Long-term, it has a chance to make a bigger, permanent
difference, because Takatsu has been very suuccessful in the past
(Japanese leagues' all-time leader in Saves), but his
competitiveness in the majors is somewhat in doubt by pundits.
(This is actually a little surprising to me because there have
been a goodly number of effective Japanese League pitchers who
did better than "well enough" since Masanori
Murakami broke through the Rice Paper Curtain 40 seasons
ago).

But Takatsu is being given a chance to be more effective in
his early outings, and with ballplayers, like any staff in other
lines of work, early success frequently breeds confidence, and
confidence frequently engenders better performance.

BEYOND BASEBALL

Strategically, not showing off your strategy before you have
to is a no-brainer. In a competitive or military environment,
giving your antagonists a chance to play through scenarios to
counter your drives never pays (unless you false-card them by
shifting to a different approach while they are grinding through
the development of counter-moves). In the ongoing Iraq War you
saw this on both sides; each side surprised the other
strategically, the U.S. surprising the Iraqis by not rolling out
the carpet-bombing shock and awe offensive it promised, and the
Iraqis surrenduring by not surrenduring and melting away to fight
a non-traditional war instead of defending Baghdad. It always
amazes me when a company puts out a press release that lays out
its new strategy for everyone including competitors. Given the
ineptitude of most American executive teams, the odds that
they'll accurately be able to reverse-engineer your strategy
quickly if you don't tell them is close to nil.

Tactically, it's trickier. If you're a manager in a predatory
organization (managers work to undermine each other for sport, or
play the zero-sum advancement games I call "roller
derby"), this kind of aikido can make you a very dangerous
person to attack.

I used to run a eight-person organization in publishing for an
editor-in-chief who was a very disturbed individual. (Publishing, more than most lines of work,
attracts the poorly-socialized and people with untreated
emotional challenges because the quality of the product is not
"measureable" the way fungible products such as food,
fabric or metals are. This makes accountability rarer, and this
incrementally attracts accountability-sluffers and repels
accountability-embracers.) The group I was running worked
most closely with another eight-person group managed by a guy
I'll call Gene Mauch. The head man had told both of us that if we
could get rid of the other guy, we could have his job,
too. I didn't care to have my peer's job (more work, same money,
plus, he did a pretty good job), but my peer was afraid he was in
a "grow or die" scenario...that if he couldn't prove to
our handgun-toting editor in chief that he wanted it badly
enough, he would "lose".

So Gene Mauch would make a move on the department I was
running. He had a host of strengths, but imagination was not
among them, and he'd never managed before. When he came at us, he always came with an
approach totally optimized to take advantage of the
arguments/positions I had made the previous time. And, prepared
for that obvious Maginot approach, I would push back again with
an entirely different set of approaches. I never showed him the
same set of defensive moves twice. And given the predictability
of his assaults, I generally turned them into moments of
humilating foolishness for him, like the Union Army's sappers
creating a death crucible for their own division at the Civil
War's battle of Petersburg, or like Rip Sewell's second eephus
pitch to Ted Williams. After about the fifth time, he started
sending his assistants to try their skill. They weren't as smart
as he was. I became a guy with a reputation greater than my
actual abilities, & no one but the headman himself wanted to
mess with me.

Friday, February 27, 2004

John Schuerholz: Sim-City Zen-Master

One of the hardest things to do well in most organizations is
succession-planning. Operating the present is challenging enough
to most American-trained managers (and since most American
managers aren't given any formal training, those struggling but
trained ones are better off than most). Succession planning, what
I call pre-volution, has many facets, from organizational
structure, to strategy, but mostly, personnel. How do you build
people to take over as the next generation of [jobtitle], what
skills will they need that the incumbent has, what skills will be
needed the incumbent is missing, what skills will the job require
then that it doesn't now, will the organization even need a
[jobtitle] by the time incumbent is ready to move on?

Baseball is a wonderful petri dish for succession planning, a
window on an amazing on-going experiment, because baseball
players, unlike those in most skilled jobs, have a predictable
lifespan that's based on age. Yes, coal miners and construction
workers wear out, too, but they are the exceptions. In most
organizations stuff just happens, and as in nature, evolution,
there are mass extinctions, Ouspensky-like catastrophes,
exploding heads, mass hysteria and silly Dilbert-quality
ineptness.

In baseball, though, everything moves faster, you have
to have some plan, which means you have to examine the future and
find that challenging middle ground between pretending it'll all
be the same (MBWT -- management by wishful thinking), and
pretending everything will go your way (MBWT of a different
nature).

I used to use the computer tool Sim City to train
managers who were planning-impaired. Sim City, if you're
unfamiliar with it, was Will Wright's magnificent urban planning
simulator, Nobel-prize quality brilliance. Because you can make
it speed up and fit a decade into a minute if you choose, because
you can limit resources, and you get do-overs, Sim City
is an almost perfect training tool for succession planning. And
baseball, with its relatively rapid pace of change is almost like
Sim City.

YOU SAY YOU WANT A PREVOLUTION

Nature evolves, but good management prevolves, that
is, while things in nature just happen, adequate management
pushes and shapes responses consciously. The effects are
most visible in baseball.

I think the Sim City Zen Master award has to go to
John Scheurholtz, GM of the Atlanta Braves. He's done what he
needed to do to keep his team very competitive for 12 consecutive
seasons, and baseball has changed since then (the owners juiced
the ball, then took it down some, successful management theories
have blossomed and died, unsuccessful management theories have
popped up and deliquesced).

End of the Road?:
Many analysts predicted that 2003 would be the final year
of the Braves' dynasty. Their once-vaunted rotation
didn't look so fearsome after losing Tom Glavine and Kevin Millwood to division rivals, and there
were few bright spots in the lineup.

But as they've done every year
since 1991--save the washed-out 1994 season--Atlanta
nabbed another division title, largely on the strength of
their free-agents-to-be. In the process of facilitating a
$15 million budget cut, the Braves said goodbye to much
of their core for the first time in years. But take a
look at how much the hitters let go by the Braves are
expected to regress in 2004:

John Schuerholz
deserves credit for letting these guys go. Drastically
lowering salary was not a problem he had to take on very
often during the dynasty. He chose wisely to let the big
spenders in the AL East throw their money at his aging
hitters instead of re-signing them and cutting salary
elsewhere. Looking at the numbers above, it is clear that
the Braves probably wouldn't have been able to
repeat their offensive rampage in 2004 even if they were
able to keep their 2003 lineup intact.

VORP, btw, is a player performance projection technique,
highly-imperfect, as they all are, but one of the most
interesting ones.

If you look at the Prospectus numbers, you'll notice three of
the four players he let go are expected to decline in offensive
production by the projection formula. He didn't try to stay in
the same place by passively MBWT-ing. If the projections end up
being true, and again you have to work from assumptions and
intel, even if he had tried to preserve the offensive status quo,
these guys wouldn't have let him maintain it.

Fine Sim City move, parallel to cutting off
electricity to churches when utility capacity is strained. Now,
we can't trust that these numbers are "truth", but in
successful succession planning, you have to have some indicators,
and at a glance it looks like the measures Schuerholtz is using
are parallel to VORP's indicators.

And to press a point made in the perceptive Prospectus
article, this is another big set of changes in a long parade that
Scheurholtz has helped navigate gracefully. For years the Braves
were a pitching team, but last year they lost a pair of their
best, and they managed to win their division again remade as an
offensive Infernal Machine. That's prevolution wrought elegant.
Will they finally fold this year? It's always possible, but
there's much to learn in your own operation by watching
Schuerholtz work.

You can't stop devolution, you can only prevolve your
way around it. I can't remember if it was Wes Westrum or
Jean Cocteau who said that.

2/27/2004 07:40:00 AM posted by j @ 2/27/2004 07:40:00 AM

Wednesday, February 25, 2004

Warrior In The SpotlightBut Adrift In The Doldrums

Ever had an employee who just shined in the crisis moments and
the most important assignments but sort of two-stepped his way to
mediocrity for the ordinary?

Don Malcolm, the Ralph Nader of sabermetrics (bound to
polarize a room into two groups: big fans and people who'd like
to strangle him because of their own inner demons or
limitations), published
a new study to test a theory about batters who hit
differently against good opposition than they do against bad. In Pedro
Guerrero and the Dark Ravine, he analyses year-by-year
splits of Pedro
Guerrero's batting stats. Pete Warrior consistently, almost
universally, hit better against good teams than bad.

Here's a slice of the information, a part of Guerrero's
career, Don presented:

The first set of numbers are against good opponents, the
second set against bad ones. The key number is OPS+ a
single-number measure of offensive quality. As you can see, while
Guerrero was excellent against bad teams, he was completely
transcendant against the good ones during this seven year
stretch, and only in one year was he just the same.

That's counter-intuitive. As a rule, better teams have better
pitching --not universally, but it's rarer for a good team to
have bad pitching that's easy to knock around than for a bad
team. For example in the National League in 2003, three of the
four teams that made the playoffs finished in the top half in
ERA, and the fourth, Atlanta, missed the top half by one spot.
All four teams were in the top half in fewest hits and walks and
homers allowed per 9 innings, and all but Atlanta were in the top
half in strikouts per 9 innings. That's one data point, &
while not universally determined, it's solid as a general
rule.

Malcolm has used this tool to try to see if there's some
predictive measure. For example, he noted Bobby Kielty failed
against poor teams while succeeding against good ones, and thinks
it might presage greater success the following season, that is,
that a breakdown against poor competition is possibly easily
remediated if it appears the batter has solid performance against
the good teams' pitching. Malcom's going to study a range of
other batters to see how common this pattern is and if it
correlates in a way that makes it useful as a predictor.

If it turns out Guerrero is very unusual, he might end up
being remembered for more than doing to third base fielding what
Hitler did to Poland.

BEYOND BASEBALL

Outside of baseball, you see this pattern all the time. It's
very common in sales departments because too frequently the
department has designed incentives to reward the sharks who can
close big deals now. So a lot of salesfolk
reserve their biggest efforts for the star venues.

Ever go to a Broadway performance in the afternoon? If the
main cast members and not the understudies are on stage, you'll
inevitably see one or two who are award-deserving at night
performances easing through with minimum effort during the day.

I worked with a copywriter who only pulled out the stops for
the marquee jobs -- she could be brilliant or
mediocre/replacement level (by choice) and it correlated totally
to the name-recognition of the client.

In France, the whole nation's organizational culture used to
be gripped by this. Perhaps it's not such a sharp dichotomy now,
but when I lived there, if you went to a fine restaurant, you got
exceptional cooking, much better than the average for here. If
you went to a low-end place, it was much below our average. This
pattern even extended to individual menu items: they'd make a
giant, Pedro Guerrero effort on the fancy specials, and two-step
in an ordinary way down at the bottom of the menu with their less
expensive or showy dishes.

As a manager you can control quality when you notice this
pattern. You can try to balance the mojo for particular jobs by
offering other incentives (gifts, recognition, etc.) on the
apparently-lesser jobs. You can try to fake out the Pedro
Guerrero by telling her these unimportant jobs really are marquee
(short term possibility, not long). If you have multiple staff,
you can just give all the high-tone jobs to the Guerrero
and dole out the rest to everyone else (I don't recommend this
approach). Or you can confront the Guerrero and tell her she has
to show better effort on the less showy jobs.

The approach you take should hinge on what other staff you
have and whether you think the Guerrero can change. But there's a
lot to learn by following Malcolm's approach and trying to
discern patterns. You should always be observing your staff to
see what they do well and don't do well, so you can optimise your
task delegation, change incentives or re-design job descriptions.

¿And while you're at it, will you PUH-LEEZE get Pedro Guerrero off
third base and back into left field?

2/25/2004 08:10:00 AM posted by j @ 2/25/2004 08:10:00 AM

Monday, February 23, 2004

Orioles', & Your, Quest forSix-Tools Players

The Baltimore Orioles' front office uses a technique different
from but parallel to that of the Oakland As' approach: find a way
to use regression analysis of existing, available data to
discover proprietary measures that might give your team a
competitive advantage in personnel selection. The Orioles'
technique is one you can use in your own organization if it has
the courage to battle the fear-inspired resistance likely to
emanate from H.R. and Legal.

According to this Baltimore
Sun story, courtesy of Baseball
Primer, the Orioles have exhumed an approach they pioneered
(in baseball) back in the middle 1950s: using standardised tests
of mental make-up. I haven't yet been able to find a copy of the
test they are using, but according to the story, it's used across
baseball, so all teams have access to the same data. The Orioles'
difference is that Dave Ritterpusch, their director of baseball
information systems, has taken enough interest in the tests to do
the same kinds of things with the available data as Paul
DePodesta has been doing with on-field performance data. That is,
Ritterpusch has been running what appears from the story to be
regression analysis, comparing early psychological test results
to historical information about draftees and what kinf of success ended up
achieving.

The article makes it sound like the team has created some
formulae based on patterns in the data to create indicators they
have found predictive. That is, they believe that for each
position on the field, differentiating even starting pitchers
from relievers, their test-result patterns that lead to greater
probability of success.

It's a chancier strategy than the As', because the baseball
events the As are using are in the external, easily measurable,
world, while the Os are testing for interior tendencies and
people are mutable. They don't ignore the other facets, just use
this regression analysis as an additional perspective.

BEYOND BASEBALL

It's finding a niche and exploiting it. Depending on the
quality of the test and the quality of the analysis, I believe
this is wonderful technique.

I use a host of tools in my own practice for gauging
personality and aptitudes. Some pop-psych profile systems are
actually very useful when constrained to a work setting (that is,
normal people at work exhibit a narrower and more consistent
range of personality traits than they do in their
"real" lives, so the profile systems don't need to be
as complex or robust). I can recommend a couple of
widely-available examples that are useful on the personality side
if you write me.

In large organizations, there's usually resistance from H.R.
and Legal, because they're more worried about getting sued than
they are hiring and nurturing the right people and making sure
they're in the right position -- that is, like bad baseball
managers, they are more concerned with avoiding mistakes
(not-losing) than they are with exploiting opportunities
(winning).

Overcoming that barrier is important, and if you have the mojo
to make more mental kinds of profiles part of your toolbox, you
can greatly increase the depth of your organization's strength.
And on a cautionary note, in the wrong hands, these kinds of
profiles can lead unhealthy organizations to over-optimize on a
small number of "types", rendering them less able to
evolve or be dynamic.

Given that they are competing in the AL East Drillion-Dollar division, I think
that's the least-likely challenge the Orioles are going to face
with this interesting model.

2/23/2004 07:45:00 AM posted by j @ 2/23/2004 07:45:00 AM

Saturday, February 21, 2004

You CAN Mess With Texas. Every Time

You might have noticed a little coverage lately of the Alex
Rodriguez-to-the-Yankees deal. A couple of readers asked me
to post some management take on it. That means I need to ignore
Alex, Stonebender, and the Yanks' 2004 roster.

That means we need to talk about the Texas side of the
equation, because that's where allthe
juicy management lessons are.

BUT FOR THOSE EAST OF THE HUDSON &
SOUTH OF THE CLOISTERS...

...a quick tidbit, courtesy of Baseball Primer.
According to a story in
the NY Post, the Yankees have been trying to trade Soriano
for years, part of an ongoing strategy of bring up bright young
talent, buffing them up for the press (the press is a willing
co-conspirator in this endeavour, because New Yorkers in general,
and Yankee fans in particular more than most New Yorkers, have a
need to believe every Yankee system prospect is better than any
other system's prospects), and once the baseball universe buys
into it, monetizing that added P.R.-component of their value by
trading the hot shot away. Think ex-Yankee hotshot Gerald
Williams who was collecting a paycheck last year at age 36,
having had his last net-positive season in five years earlier.

Here's a snippet from that story, which, given it came from
the Post, may or may not have any element of truth in it (I love
the Post, btw, and I would have taken their headline-writers to
work on my stories any day, but the standard of news
reporting there is one stratum below the National Enquirer).

It is interesting now how
close the Yanks came to trading Soriano before this. There
had been a completed deal to Houston for Moises Alou in 2001,
but Alou invoked his no-trade rights. Before the 2000 season,
Yankees officials were bitterly split about turning Soriano
into Jim Edmonds. The Yanks agreed at one point to a
three-way trade that would have netted them Matt Clement and
B.J. Surhoff before it fell apart. They once nearly
moved Soriano to Seattle for Jose Paniagua and Brett Tomko,
held serious discussions about sending Soriano to Toronto for
either Kelvim Escobar or Roy Halladay...

As a Seattleite, I have to wonder how the Mariners might have
brought themselves to give up both Brett Tomko and
Jose Paniagua (Joe Bread-and-Water, as he was known here) for
A-Sorry.

THE TEXAS REPUBLIC: WHITE HOLE OR BLACK
HOLE?

But all the coverage has been of the New York side. Surprise.

For every black hole in the universe, there's (allegedly) a
white hole. It's been assumed that New York harvested all the
benefits, Texas is just lead-bait, like one of those Indians in a
John Wayne movie, just waiting to absorb a bullet and fall off
his horse back and to the side, with an "Aiyee" and a
fleshy thump. Perhaps, but unlikely. Let's look at a few things
from the Texas end.

LESSON #1 - ALL HAT AND NO CATTLE

People who are good at investing other people's money tend to
not be good at investing their own. Tom Hicks, the owner of the
Texas Rangers, generated most of his wealth using other people's
money and working sweetheart deals for public subsidies and
working kickback-like favors running pension operations. That is
not to be dismissed as a skill. It requires brains and panache.

But owning and operating your own business in a competitive
area away from patronage requires a different set of skills. I
frequently ask the question of managers assessing or considering
the hiring of other managers at any level (including CEO). The
question is, "If [candidate] was
the assistant manager of a 7-11, would he do a great job, an
okay job or would he be a failure?". I call that The
Assistant Manager of a 7-11 Test. Tom Hicks wouldn't pass the
test (and neither would about 40% of the CEOs at the helm of
half-billion dollar and bigger corporations in the U.S.). C-level
execs like to pretend this stuff isn't important, that what they
do is "different". And while it's different, you have
to master the Assistant Manager of a 7-11 skill set to have any
chance at all of succeeding higher up.

Hicks drove that original Alex Rodriguez deal, and he got the
second best player currently in the game, and a delightful public
presence (though perhaps more Eddie Haskell than the Leo
Buscaglia Rodriguez pretends to be). But he wasted anywhere from
$40 million up by raising the ante after there were no other
bidders. And you can do that when it's the public's money, or
your friends in high places can recover that for you with a grant
or some sweetheart deals. But not as the owner of the Rangers.

That contract made it challenging for Hicks' operation to do
other things that needed to be done to keep the team competitive.
Not impossible, but challenging. The Rangers are not a terrible
organization, nor a terrible team (just a not-particularly-good
one). But Hicks is not a real entrepreneur/manager/businessman;
he's all hat and no cattle, a Potemkin hacienda-owner. His
talents lie elsewhere.

LESSON #2 - THERE ARE TWO SIDES TO EVERY
TRANSACTION

I'm not a big Alfonso
Soriano fan, but he's not exactly Gerald Williams either.
Memories of him now are mostly hyperfocused on his comically
disastrous performance in the last World Series.

What did Texas get on their side of the deal in acquiring him?

1. They got a guy who was an unremarkable-fielding shortstop
in the minors who was moved to second base, a position at which
he is simply dreadful, and watching him play there is redolent of
the last reel of the second Alien movie. Texas won't likely play
him at second base most of the time, increasing his net value.

2. They got a guy who kicks serious grass in the Rangers home
stadium.. Given that, it's gonna boost his home stats
significantly:

Scary numbers, though a fairly small sample. But do you think
people they'll complain about his low walk rate rate if his
on-base percentage at home is .465? Those doubles are very
impressive, and the homers nothing to sneeze at.

Technically, given A-Sorry is playing half his games in that
park, they might have a guy who is competing for a
batting title, and putting up good power
numbers, too (that is, he could look a lot like Alex Rodriguez as
a set of numbers to casual observers). Those are better numbers
than the other middle-of-the-lineup stud (well, Viagra stud) R.
Palmeiro put up playing in Texas (though Palmeiro's sample was 19
times the size).

A-Sorry is simply worth more to the Rangers than the Yankees,
because of the environment and the teams' existing rosters.
Management lesson here is that some things are worth more to the
person who got the asset than the one that neogtiated it away.

There's a somehwat overblown legend about Boston's Fenway Park
and its short, high left-field fence destroying good hitter
because it was so tempting (and seemingly easy) to pop balls off
that wall for doubles. It was very true for certain
hitters, who would distort their approach to try to take
advantage of the opportunity for easy pickings, and fail.

A-Sorry is going into a parallel situation. He's moving to the
American League park which in which he's put up the best (by a
big margin) numbers in his career.

And given his lack of discipline, he could exacerbate his
Achilles Wheel, his orgone-drenched passion for swinging at
cruddy pitches. Over the last three years, he's only walked in
about 5% of his plate appearances, about half of the frequency
considered low. In his small Texas sample, he struck out 22% of
the time, very high, but not legendarily so.

If some of those strikeouts turn into hits, or even of he keeps
it at that very high level, he could succeed. But if his lust for
putting the ball into play hard amps up with a little better
success, he could disappear entirely into the cloaca of his
strike-zone dementia, disappearing below the Event Horizon of his own lack of discipline like Maxmillian Schell at the end of The Black Hole. Emotionally mature players can resist the
siren call of the tater. A-Sorry hasn't yet shown he's mature, so this one is still up in the air.

Beyond baseball, you see this a lot. A company that has, for
example, very effective direct mail, finds it hard to use other
techniques, like advertising, or internet marketing. If they move
into a zone where they've always had good success with their
strength, they can hyperfocus on that and miss the required
balance. And it happens with personnel, too. I worked for a
company that had the most fantastic engineering department. When
the company got an influx of cash, they just hired more (really
fine) engineering guys, because it was their strength. They
didn't need more engineers, even really good ones. They
needed operations skills and some creativity in the financial side
and a bit of luck, but they came off the tracks in a haze of
passion for their passion.

For every black hole, there's a white hole. Which one is
Texas?

2/21/2004 07:40:00 AM posted by j @ 2/21/2004 07:40:00 AM

Thursday, February 19, 2004

Bleeding Dodger GreenBean Counters or Beane-Counters?

The Dodgers this week chose sabermetrically-drenched Paul
DePodesta, he of the Moneyball
stardom, to be their G.M. It wasn't a given.

Thanks to Steve Nelson of the always-interesting Mariners Wheelhouse, I read
that just days earlier, according
to the Los Angeles Times, the team was interviewing another,
very different candidate, Dennis Gilbert, whose diverse
background would have made him unique in G.M. circles. Some of
his background in the highly-abridged snippets below:

Former agent Dennis
Gilbert, who has spent the last three years working as a
special assistant to Chicago White Sox Chairman Jerry
Reinsdorf, interviewed
for the Dodger general manager job Saturday.

Gilbert, a Los Angeles native and longtime Dodger follower
who was part of a
Jeff Smulyan-led group that failed in its bid to purchase the
Dodgers last
year, was recommended for the position by Reinsdorf.

[snip] Gilbert, a 55-year-old who has a strong background in
negotiating contracts and scouting, did confirm that the
interview took
place.

"I've known Dennis for 20 years, first as an agent, and
then working with
me," Reinsdorf said. [snip]

"He certainly knows how to negotiate contracts, and one
of the problems the
Dodgers have had over the years is they've paid [players] too
much money. He
knows the market. He has a great mind, a really fertile mind,
and lots of
good ideas." [snip]

Among his clients in 18 years as an agent, a period in which
Gilbert broke
several salary barriers, were George Brett, Barry Bonds, Jose
Canseco, Mike
Piazza, Bret Saberhagen, Bobby Bonilla and Danny Tartabull.

Since selling his stock in the firm in 1998, Gilbert has been
involved in a
number of ventures, including starting an insurance practice
that
specializes in policies for major league players and
entertainment industry
professionals, and establishing and raising significant funds
for the
Professional Baseball Scouts Foundation.

Gilbert has attended roughly 75 games a year in Dodger
Stadium, and while
going through Major League Baseball's due-diligence process
as a prospective
owner, Gilbert spent several weeks in 2003 conducting a
thorough examination
and review of the franchise, including the front office and
the farm system.

So in Gilbert there was
candidate who had been a succssful agent (other side of the table
perspective), prospective owner (able to empathize with the
owners), lots of exposure to the Dodgers as an outsider (75 games
a year attendance), some scouting background of indeterminate
success (though the fact that his charity work was for scouts
would tend to make scouts empathize with him, so he'd be able to
tap into other scout perspectives).

Reinsdorf, his current
employer, saw this candidate as a winner primarily
because he believes Gilbert is a great negotiator.

My first reaction was disgust, in part because I dislike
Reinsdorf's history and significant responsibility for some
adversarial (against players and fans) positions as an owner, and
his significant responsibility for making the Joe Lieberman of
Baseball, Bud Zelig (why Lieberman? Inept, Greedy, Nice Guy To
Those Who Know Him Personally) the Commissioner. My first
reaction was Bean-Counters on the Loose
(Fineman Films, 1974),
the thought that Reinsdorf really believed that a master
negotiator (Gilbert is a much "better" negotiator than
say, Scott Boras, whose scorched-earth policy means teams come
back to him only when they have to) was a person you wanted to
rebuild a proud but increasingly-tattered franchise. The
Reinsdorf thought being that if you could just drive down player
salaries and scouting costs and minor league agreements and all
the things G.M.s can affect on the cost side, you could create a
profitable franchise. If you read this weblog often, you know
it's unlikely that any organization that has as their mission
"maximizing shareholder return" will ever achieve
excellence except in the net profit department, that if gross or
net are your raison d'etre, your focus on winning as a goal is
necessarily diminished, and therefore becomes less likely.

But once my churning chelm settled down, I realized Gilbert's
set of aptitudes would be unique among G.M.s/competitors. And
there were some very good aptitudes and ways of looking at
things. For example, he may or may not have been a good scout,
but he learned the scouting way of looking at data. That's a
filter, a set of tests, a way of examining and processing data. So
was his experience as an agent, and so was his experience as a
prospective owner. And he's both outside the Dodger organization,
while at the same time he allegedly attends 75 Dodger games a
year, which makes him fairly knowledgeable about what existing
players do and don't do well.

Uniqueness in itself is a positive, especially in a closed
system such as baseball. As Richard of the Just A Gwai Lo
blog believes,
one can profit just by being in the minority (and it helps a lot
to be correct). Richard & I both believe some of the success
of the DePodesta-Beane team in Oakland derives from their being
alone in pursuing a strategy. And yes, the sabermetric approach
has more followers now (Toronto, Boston, perhaps St. Louis,
perhaps others not advertising), and the comparative
advantage of the approach is bound to fade a little with each subsequent addition. So a unique strategy based
on negotiation and the loyalty and diligence of scouts might work well even if it wasn't THE optimal strategy.

I'm really glad the Dodgers chose DePodesta. It'll be
interesting to see how the cognitive grandson of Allan Roth
guides the franchise. But Dennis Gilbert would have been an
equally interesting, and unique, choice to watch manage a
baseball franchise's front office.

Executives outside of baseball take note: There are a hundred
ways to solve most complex challenges. As Richard says, sometimes
just being in the minority and having a workable/right solution
is, in itself, the optimal approach.

2/19/2004 08:20:00 AM posted by j @ 2/19/2004 08:20:00 AM

Tuesday, February 17, 2004

PART IV: Paul DePodesta: If You're "The House", You Can Be Fearless

In previous entries on the Paul DePodesta
presentation to non-baseball managers on change management
(off-line as I write this), I've covered a few of his techniques
& insights. This post continues that series, and is not the
last.

Let me note that yesterday, the Los Angeles Dodgers, the first
organization to hire an official team statistician (Allan Roth),
chose this highly numerate young man to be their new
G.M.

Paul DePodesta, the
Assistant GM of the Oakland Athletics featured (not
extensively enough) in Michael Lewis' Moneyball, is one of the most interesting of
the new statheads in baseball front offices. What separates
him from the others is not that his stats are better or
deeper, it's that he understands the key, final,
most-difficult-to-master concept in the Management By Baseball model: Change.

He understands that to
successfully manage and push change, you have to change he
changes you deploy, even as you're concurrently fighting to
install them in the first place.

To understand the system he was working within better, he kept
asking naive questions. And in return, he got a lot of opinions.

The response to all this
questioning was somewhat expected. There were opinions
layered on top of opinions. A lot of people were saying,
"I think it's because," or "maybe it's
this," or even "that's the way we've always done
it". My industry is comprised on human capital -- the
players are our assets. So subjectivity plays some role. But
the enormity of the subjectivity was staggering. [snip]

Opinions are great -- don't
get me wrong. They're great for starting research projects.
Then you go study and see if you can prove the opinion or
not. But when placing multi-million dollar bets on future
outcomes, opinions are wholly unsatisfactory. Opinions
as conversation starters are fine. Opinions as conclusions
are very bad.

I started research projects
to discern the objective "why". I wanted to know
why certain teams won and why otyher teams lost; why certain
drafts produced big stars and others didn't.

This was the naive question put to work.

DePODESTA INSIGHT: OPINIONS ARE
FOUNDATION, ANALYSIS DELIVERS ACTION

He knew he wanted to instill analysis into the mix. He knew
he'd need measures, But like many managers outside of baseball
who are trying to develop and direct changes sensibly, he was
faced with "information overkill"...too many
unintegrated numbers and no established systematic way to balance
and blend them. DePodesta threw himself at an old sabermetric
drill, using Markov technqiues to find probabalistic
relationships between baseball events and run scoring.

I was able to figure out
that a man on first with nobody out is worth "X"
runs and a man on second with two outs is worth "Y"
runs. From there I was able to jump to understanding what it
means to have someone who can hit a lot of doubles. What was
the value of that event and others? I went a step further and
asked who the people were who could add these value-enhancing
skills to our team.

The result is a model that can assign some marginal value to
each thing that can happen on the field. Then, you can apply that
model to calculating a rough value for each player, as well as
shape in-game strategies and plan training effort (to maximize
training in the components that have the highest rewards).

And to go along with the probabalistic model, he imported an
analogy to buffer the fear most people have of change.

DePODESTA TECHNIQUE: BE THE HOUSE

The analogy was a casino analogy: "Be the house".

Any individual bettor might win any individual bet against the
casino (the house). But the odds are in the house's favor. Chain
together enough events, stack in enough betters making enough
bets, and probabalistically it's overwhelmingly likely the house
will come out ahead.

Because baseball has such a long season (so many events), if
you can just identify and grab enough small edges, you can
"be the house" and win, as DePodesta aimed for, 60% of
your games. It means failure (40% of the games are losses) is
permissable and therefore no cause to panic, because you're going
to (at least you set yourself up to think this way) win in the
end.

Every season we play 162
games. Individual players amass over 600 plate appearances.
Starting pitchers face over 1,000 hitters. We have plenty of
sample size. I encouraged everyone to think of the house
advantage in everything we did. We may not always be right,
but we'd be right a lot more often than we'd be wrong.

BEYOND BASEBALL: TWO DePODESTA
APPLICATIONS

In many organizations (clearly not all), there are collections
of things that were once processes, alive, evolving, that have
ossified into habits, supported by opinions. As in baseball, they
are supported not by rigorous examination or testing (that may
have been done when they were first established), but by habit,
involuntary gesture. In anthropology, we call these
"survivals" like the behavior (almost involuntary on
the part of the speaker) of saying "God bless you" in
response to someone sneezing. More often than not, the speaker
doesn't truly believe that at the moment of sneezing, the sneezer
is subject to being possessed by an evil spirit, the reason
people in the 12th century were trained to say "Gode blesse
ye" to prevent such nefarious doings. (Aside:
Perhaps I'm being optimistic when I say "more often than
not". I go to a wide-demographic site called Iwon, and they
have polls for their visitors. One was about evolution versus
creationism. The results indicated about 20% believed in
evolutionary biology, about 20% believed God created all life the
way it was in 4000 B.C., and about 40% believed the totally
impossible Baked Alaska that really it was both at the same time.
So perhaps a plurality of American believe, along with the Bundi
of Borneo -- yes, the bones in the nose dudes -- that sneezing
makes one subject to possession by evil spirits).

So putting a yardstick to presumptions, finding out where the
support for behaviors is a habit and not the result of ongoing
examination, is a fruitful way of turning up opportunities to be
aggressive.

And "being the house" can be productive, too, in
many settings. Not all shops are like this, for example, the auto
mechanic place up in Everett that mostly does tune-ups for
Porsches and Audis. Close-enough is no-good, only perfection is
acceptable because the equipment wasn't made to be even slightly
tolerant. And, because there are not a lot of transactions over
which to accumulate an edge.

But more likely than not, you have some processes in your own
organization that are repeated frequently and where perfect is
not perceptively better in any way to "close enough".
These are great targets for re-tooling, because if you can figure
out a way to "be the house", that is, install a
strategy that's a winner over time, you can reap constant
rewards. And you can buffer staff fears about occasional
"losses" which always accompany change but must not be
allowed to halt it.

BUT, please note, you have to keep measuring results.
Unlike a casino, the environment shifts subtly even when your
assumptions were totally correct. But sometimes, your assumptions
are going to be flawed, because data can tell you only so much.

As baseball
researcher Don Malcolm will be the first to remind you, the
model DePodesta created for the Oakland A's (more on that in the
next entry in this series), worked well, but not well
enough. The model paid tribute to in Moneyball was
heavily re-tooled. Yes, the As still have more than their share
of unathletic bodies, but their success in the last couple of
seasons is more attributable to three "ace"-quality
starting pitchers and defense that was improved over the original
model that rejected defense as an overpriced hood ornament.
Through observation, DePodesta learned that attributes like
defense and team OBA were not linear functions charted against
success, but non-linear one (for example, you can yield on
defense only so far before the model decays and goes China
Syndrome).

In my next entry in this series, I'll continue this
exploration of DePodesta's insights & techniques,
specifically related to how he worked to make the change happen,
the (very successful, and contrary to the way I usually try to do
it) organizational development approach he took.

2/17/2004 07:36:00 AM posted by j @ 2/17/2004 07:36:00 AM

Saturday, February 14, 2004

Those Magic Managerial Moments--Pick Yer Little Poison

It doesn't happen often enough, it requires luck and knowledge
both, but there are times as a manager when you think through
something quickly and just hit it right on the head. In baseball,
it's a manager's Bernie Carbo moment, when with a World Series
game on the line, you call for a pinch-hitter, and he essentially
wins the game for you with a homer (if you read the play-by-play
game line for the famous 1975 World Series game six that has
the Carlton Fisk homer video byte, you'll realize it was Carbo's
homer, not Fisk's, that was the deciding blow; Fisk's, for the
home team in extra innings, was statistically almost a foregone
-- or even fivegone -- conclusion). In baseball research, it's a
Lloyd Waner moment, which I'll get to in a minute.

You gotta love those events, the total sweet spot, George
Brett swinging as hard as he can and getting 100% of Goose
Gossage's hardest fastball, whether in baseball or in management.
They don't happen all the time, but the satisfaction of them
persists, and serves to defend the psyche when things aren't
going so well.

I was once consulting to a small, intentionally lean group in
a wonderfully aggressive organization that had new management
that wanted to prove to the world that the old regime was bad (it
wasn't...not even close). Because the laws of physics, gravity
specifically, apply to fecal matter on a steep embankment, one
can expect that fecal matter to move in the obvious direction. In
this outfit, the program managers were getting pressure from
above to do "more with less", and they, in turn, were
trying to deliver to impress the new executive team by
"making it happen". But program managers, unles they
roll up their sleeves and pitch in, don't do the work that makes
things happen; they just beat the drum rhythm faster. And this
group I was working with was already hyper-optimized and pushing
hard.

Worse, the program managers were playing a zero-sum game, each
wanting all the resources for their own program,and having no
incentive to be concerned about anyone else's program.

I needed a tool to (a) protect the lean group from the Tragedy
of the Commons madness of the program managers, (b) squeeze an
extra 2-4% measureable effectiveness out of them that would
indicate enough "progress" that the new executive team
wouldn't think they weren't "doing more" in response to
the marching orders sent down from on high, and (c) trump the
efforts going on in the rest of the company in a way that made
the group untouchable for a while. I'd used lots of tools in
similar situations, but never the particular one I used here. I
was just guessing based on a combo of some real factors and
intuition.

In this case, the tool was merely an electronic Project
Management package that output Gantt charts, the kind of tool no
one else in the entire multi-million dollar company was using
(and in most cases, had never tried to understand before). The
group's manager already did this kind of work in her head quite
effectively. But the tool addressed all three challenges, in this
case, perfectly, George Brett swinging as hard as he can
and getting 100% of Goose Gossage's hardest fastball. The
intentionally-giant Gantt print-outs were the The Great Wall of
China, unarguable, especially by the program managers who didn't
know how to produce them themselves. The tool helped the manager
and me do some creative re-sequencing that did squeeze out a
couple of extra percent of production without burning people out.
And it made the group look so much more technically sophisticated
in comparison to the rest of the company that the executive team
left them alone for two rounds of layoffs that resulted in big
bonuses to the executive team.

I hit that 100%, and like a game tying line-drive gapper in
the bottom of the last inning, it felt beautiful coming off my
bat and has resided in my memories ever since as one of those
perfect moments I'll carry to my grave.

100th-PERCENTILE HAPPENS SOMETIMES

It does. The perfect storm. Brady
Anderson's 1996 season. The script for the movie The
Usual Suspects. Bob Beamon's Olympic long-jump. Sometimes, against the laws of entropy, the
dance of random chance lines up all the random factors in your
favor and perfection occurs.

In my entry
a week ago, I was trying to make an analogy about 'focusing
on outcomes', and I chose to make an analogy out of a batter who
hit for high average, but was actually an offensive drag compared
to average for his team. I was in a hurry and just plucked Hall
of Famer Lloyd "Little Poison" Waner out of my memory
as a poster boy. I knew he was an decent example, but I was just
guessing based on a combo of some real factors from memory and
intuition. I didn't check my database or anything scholarly, I
just grabbed the least-useful non-pitcher in the Hall of Fame.

It turned out that Little Poison is not only a good
poster boy for high-batting average, net-offense-negative
performance. In response to a message from someone wanting to
know the all-time best batting averages that had OPS+es at or
below average, I ran a query against my normalizing database and
it turns out frelling Lloyd Waner's 1930 season is, by a megaton,
baseball's all-time leader in the pattern I was trying to
describe. Sometimes you're the windshield, sometimes you're the
bug. Sometimes you're George Brett.

And because the message writer wanted a top-ten list in this
category, I produced it and share it here, a trifling but tasty
piece of statistical trivia.

Here are the top 12 seasonal batting averages of all time
(minimum 200 plate appearances) that are associated with
no-better-than-average hitting usefulness, with the RPRO column
representing a measure similar to OPS+, normalized so the league
average equals 100, with higher numbers being more valuable:

BA

Year

Apps

First

Last

RPRO

Roba

RSlg

0.362

1930

265

LLOYD

WANER

99.7

105

95

0.330

1925

237

HOMER

SUMMA

100.2

106

94

0.327

1996

210

ROBERT

PEREZ

95.9

101

91

0.324

1930

326

MONK

SHERLOCK

97.5

106

88

0.324

1998

308

AARON

LEDESMA

96.3

101

92

0.319

1897

566

KID

GLEASON

98.7

102

95

0.318

1930

390

JIMMIE

WILSON

99.2

103

96

0.317

1930

378

AL

SPOHRER

99.1

101

98

0.317

1930

248

BENNIE

TATE

98.4

106

90

0.317

1922

631

HY

MYERS

97.0

96

100

0.317

1934

618

BILL

KNICKERBOCKER

99.9

99

102

0.317

1994

390

FELIX

FERMIN

93.0

99

87

Stats notes for those who care:
RPRO is my measure Relative Production, which is very close to
OPS+ but does not adjust for park factors. Apps are approximated
plate appearances.

An interesting bit of synchronicity: Five of the players on
this list are all from the same single season, 1930. As I noted
in that earlier post, it was a legendary year for offense, a year
in which a last-place
team hit .315 as a team (and that includes the efforts
of the pitchers at the plate). Even more impressively odd, three
of those five 1930-uns were catchers: Ace Wilson, Al "The
Human Spore" Spohrer, and Bennie "Lost Freight"
Tate. Given that there were over 50,000 qualifying player/year
seasons for this "measure", it's interesting that
almost half of them were from the same year.

I love these moments of perfection. Lloyd Frelling
Waner...human lesson in management, and opportunity for perfect
moment. If there was a Hall of Fame for Synchronicity, he'd be in
it.